\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 025 Huaneng Lancang River Hydropower Inc(600025) )
Event overview: on April 22, the company released its 2021 annual report. During the reporting period, the company realized an operating revenue of 20.202 billion yuan, a year-on-year increase of 4.93%; The net profit attributable to shareholders of listed companies was 5.838 billion yuan, a year-on-year increase of 20.75%; The deducted non net profit attributable to shareholders of listed companies was 5.630 billion yuan, a year-on-year increase of 17.74%. The company plans to distribute a cash dividend of 0.17 yuan per share to all shareholders. The company released the first quarter report of 2022. During the reporting period, the operating revenue was 3.941 billion yuan, a year-on-year increase of 2.72%; The net profit attributable to the shareholders of the listed company was 742 million yuan, a year-on-year increase of 23.40%; Non net profit attributable to shareholders of listed companies was 741 million yuan, a year-on-year increase of 23.03%.
The electricity quantity returned to the upward trend: the power generation of 4q21 company decreased by 24.6% year-on-year, 19.213 billion kwh in a single quarter, even lower than the level when 4q17 Lanshang cascade hydropower station was just put into operation; Benefiting from the improvement of incoming water and early energy storage, 1q22 power generation increased by 1.6% year-on-year, returning to the upward trend. However, the growth rate lags behind the growth rate of water inflow from wunonglong and Xiaowan sections, or is related to the rapid decline of power demand in Yunnan Province and Guangdong in the first quarter.
The electricity price fluctuated and generally improved: according to the estimated electricity revenue in a single quarter, 4q21 reached 0.2454 yuan / kWh, with a year-on-year increase of 6.64 points / kWh, an increase of 37.1%. Considering the nationwide “power shortage” phenomenon in that season, we believe that there may be disturbances from other factors. 1q22 kwh electricity revenue was 0.2254 yuan / kWh, with a year-on-year increase of 0.24 points / kWh, an increase of 1.1%, which was generally good.
Shifting speed up of lanshangshui scenery integration base: the last two of the seven power stations in lanshangshui Yunnan section, the 1.4 million KW Toba power station, has completed the river closure, and the dam pouring is planned to start in May; The 1.9 million KW ancient hydropower station has obtained the “reservoir closure order” and plans to complete the feasibility study review. Among the eight power stations in Lanshang Tibet section, the leading power station with 2.1 million kilowatts, such as the United States hydropower station, has completed the physical index survey and plans to promote the approval work; The preparation for the construction of 1 million KW Banda and 1.7 million KW Guxue power stations has been started, and it is planned to obtain the “closure order”. The new energy division plans to invest 5 billion yuan in 2022 and put into operation 1.3 million KW within this year.
Investment suggestion: the improvement of incoming water is expected to be gradually implemented, and the company’s power is expected to be continuously repaired; If the electricity demand in Yunnan and Guangdong continues to fall, it may pose a certain pressure on electricity consumption and electricity price trading; However, the abundant cash flow of the company can further reduce liabilities and financial expenses on the one hand, and support it to accelerate the development and construction of Lanshang base on the other hand. According to the profit forecast of the company based on the pre judgment and adjustment of electricity quantity and electricity price, the EPS in 22 / 23 years is expected to be 0.35/0.36 yuan respectively (the previous value is 0.31/0.32 yuan), and the predicted value of EPS in 24 years is 0.38 yuan, corresponding to the closing price of PE on April 22, which is 18.2/17.2/16.3 times respectively. With reference to the company’s historical valuation and the valuation level of comparable companies in the same industry, the company is given a PE of 20 times in 22 years and the target price is 7.00 yuan / share, maintaining the rating of “prudent recommendation” of the company.
Risk tips: 1) the water from the basin is dry; 2) Declining demand suppresses electricity consumption; 3) Fluctuation of market transaction price; 4) Fiscal and tax policy adjustments.
